Taking stock of the newsletters

By Rob Carrick
Personal Finance Reporter

Contra the Heard

The title says it all. This small newsletter concentrates on beat-up stocks that have the ability to post big gains. There's no effort to follow market darlings, although the editors found space in a recent issue for a scathing look at bank mergers.

Generally, each issue looks at developments affecting the 30 or so stocks in the Contra portfolio. There's also a handy scorecard in the centre spread so readers can track the performance of the stocks, which are listed on the TSE and New York Stock Exchange.

The buy-and-hold philosophy is a staple at many investing publications, but not at Contra the Heard.

"While we are long-term investors, we've always said that buying and holding irrespective of price is idiotic," says co-publisher Benj Gallander, author of The Canadian Small Business Survival Guide and a new book called The Uncommon Investor. He said that when a stock in the Contra portfolio is sold, readers are advised by fax or email.

The success of Contra's approach is promoted on the front page of every issue by listing annual returns for the past 10 years. They range from a low of 1.5 per cent in 1994 to 77.8 per cent in 1993. Mr. Gallander says the portfolio is down 16.5 per cent for the past two months and about even on the year.

If you haven't got the impression that Contra is a little, shall we say, different, then consider the fact that it has added just three stocks to its portfolio this year and briefly closed its subscription list last summer to keep its workload manageable. The publication reopened for new business on Sept. 15.

While new subscriptions cost $250, renewals cost $500. That's expensive for a quarterly newsletter of 15 or so pages, but then you're supposed to make money with information contained within. In fact, if you haven't made at least a 12.5 per cent return then you can resubscribe for $250.

Copyright Notice: Copyright © 1998 Rob Carrick Reproduction of this article in whole or in part is prohibited without permission of the author.

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